In a statement Exxon Mobil Corp said, Exxon Neftegas Ltd, its Russian unit, has declared force majeure for its Sakhalin-1 operations due to sanctions on Russia that have made it increasingly difficult to ship crude to customers.

The Sakhalin-1 project produces Sokol crude oil off the coast of Sakhalin Island in the Russian Far East, and exports around 273,000 barrels of oil per day, mainly to the United States, Australia, Japan, South Korea, and Thailand.

Earlier in March Exxon had said it would discontinue all of its operations in Russia, including Sakhalin 1, following the Russia-Ukraine war.

In a written response, Exxon spokesperson Julie King said, the company is taking steps to exit Sakhalin 1, which includes addressing contractual and commercial obligations.

“As operator of Sakhalin-1, we have an obligation to ensure the safety of people, protection of the environment and integrity of operations,” said King.

Exxon has also significantly phased down its chemical and lubricant businesses in Russia, and suspended sales of all chemical and lubricant products into Russia and Belarus.

Project stakeholders include Japan’s Sakhalin Oil and Gas Development consortium and Indian explorer ONGC Videsh. Both are finding it difficult to charter tankers to ship oil out of a region that generally needs ice vessels to navigate the journey.

Further, there is also growing concerns from shippers to find insurance coverage.

“As a result, Exxon Neftegas Ltd has curtailed crude oil production,” said King.

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